Contracts & Leasing

Rent Increase

Synonyms: Rent Hike، Rent Adjustment، Rental Increase

Short Definition

Raising rent value by the landlord, typically done at contract renewal, subject to legal restrictions preventing excessive increases and protecting tenants.

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Overview

Rent increase under Saudi law is raising the rent value agreed upon in an active contract — occurring in specific cases: at contract renewal after original period expiration, mid-period if an explicit clause allows it, or by mutual agreement amending the contract via Ejar. In the city of Riyadh, **rent may not be increased** in existing or new residential and commercial leases for 5 years from 25 September 2025, and a vacant unit’s rent may not exceed its last lease (Royal Decree M/73). Outside Riyadh, **no statutory cap exists on increases**; the matter is left to contractual freedom and market logic. An increase only takes effect if the lessee expressly accepts it. Any mid-contract increase requires explicit lessee approval and documentation as an amendment in Ejar. Outside Riyadh, a renewal increase is made through a rent-adjustment request on Ejar at least 90 days before the lease ends; if the lessee accepts, the lease renews at the new value, and if the lessee refuses, automatic renewal is cancelled and this counts as notice of non-renewal. The lessor has no right to raise rent implicitly or retroactively, and any increase not documented in Ejar is invalid.

Legal Basis

Rent increase is based on contractual freedom in the Civil Transactions Law issued by Royal Decree No. (M/191) of 1444 AH. It is limited by the rules regulating the lessor–lessee relationship issued by Royal Decree No. (M/73) dated 2/4/1447 AH, which prohibit any increase in total rent in the city of Riyadh for 5 years from 25 September 2025, with a fine of up to 12 months’ rent plus correction of the violation. Outside Riyadh there is no statutory cap, and a rent-adjustment request is filed on Ejar at least 90 days before the lease ends. Any increase must be documented on Ejar, either as a contract amendment or on renewal.

Practical Example

A villa lease in Jeddah at SAR 60,000 annually, ending in Ramadan. Market prices rose 8% during the year. Ninety days before expiry, the lessor submits a rent-adjustment request via Ejar proposing renewal at SAR 65,000 (8.3% increase). The lessee compares with similar apartments in the area, finds them at same prices, and accepts the increase. The contract is digitally renewed at new value. Alternatively, had the lessor demanded SAR 80,000 (33% increase), the lessee refuses, the contract ends, and the owner searches for a new tenant at market price. Excessive increase costs the owner vacancy period.

Common Mistakes

  • ✗Raising rent mid-contract without explicit lessee consent — clear contract breach, the increase is invalid even if justified by market prices.
  • ✗Sending increase notice a few days before contract end — doesn't respect notice period and the lessor may lose right to increase for that year.
  • ✗Proposing a large increase without real market justification — drives the lessee to leave and incurs vacancy period possibly exceeding the increase.
  • ✗Assuming verbally agreed increase is effective — not binding until documented in Ejar.
  • ✗Failing to calculate increase impact on VAT (for commercial contracts) — may create unaccounted additional tax obligations.

International Differences

In Dubai, rent increases are regulated by Decree No. 43 of 2013 using the Dubai Land Department rental index, which sets caps based on the price gap with the market; Ejari is the lease registration system. In Turkey, annual increase is capped to inflation index (TÜFE) and cannot legally exceed it. In Egypt, Law No. 164 of 2025 raised old-rent contracts and set an end date for them (7 years residential, 5 non-residential); new ones are open. In Saudi Arabia: contractual freedom outside Riyadh, while annual increases on residential and commercial rents in Riyadh are frozen for 5 years from 25 September 2025.

FAQs

Can the lessor increase rent every year?▾
Outside Riyadh, only at renewal (via an Ejar request at least 90 days before the lease ends), and not during the term except with explicit lessee consent and an Ejar amendment. In Riyadh, no increase is allowed for 5 years from 25 September 2025.
What is a reasonable annual increase percentage?▾
There is no statutory percentage outside Riyadh; it depends on the market and on agreement, and the lessee may refuse a proposed increase, which cancels automatic renewal. In Riyadh, no increase is allowed for 5 years from 25 September 2025.
Can the lessee negotiate the increase percentage?▾
Yes, negotiation is a natural right. A good lessee (pays on time, maintains the property) is often accepted at a lower rate to avoid vacancy period.
What if the lessor imposes a very large increase?▾
1) Negotiate amicably. 2) Refuse the increase and notify of non-renewal. 3) If the property is in Riyadh, the increase is prohibited, so report it to the Real Estate General Authority. 4) Search for alternatives during notice period.
Is there legal protection against excessive increases?▾
In Riyadh, yes: increases are prohibited for 5 years from 25 September 2025, with fines of up to 12 months’ rent plus correction. Outside Riyadh there is no statutory cap, but an increase only applies if the lessee accepts it; rejecting the adjustment request cancels automatic renewal.

In Other Languages

Arabic
زيادة الإيجار

رفع قيمة الإيجار من المالك، يتم عند تجديد العقد عادة، ويخضع لقيود قانونية تمنع الزيادات المفرطة وتحمي المستأجر.

English
Rent Increase

Raising rent value by the landlord, typically done at contract renewal, subject to legal restrictions preventing excessive increases and protecting tenants.

Turkish
Kira Artışı

Ev sahibi tarafından kira değerinin artırılması; tipik olarak yenileme sırasında yapılır, aşırı artışları önleyen ve kiracıyı koruyan yasal kısıtlamalara tabi.

Related Terms

Amlakire

About Amlakire

Amlakire is an integrated Saudi real estate management system, supporting agencies and owners in managing rentals, maintenance, and reports with high efficiency, preparing lease data for documentation on the Ejar platform, and compliant with Kingdom regulations.

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